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TIB Financial reported total assets of $1.84 billion as of March 31, 2009, an increase of 14% from December 31, 2008. Total loans remained flat at $1.22 billion as a $10.2 million decline in indirect auto loans offset increases in our commercial and residential portfolios. Total deposits of $1.44 billion as of March 31, 2009 increased $300.8 million, or 26%, from December 31, 2008 due to the assumption of approximately $317 million of deposits and the operations of nine branches of the former Riverside Bank of the Gulf Coast from the FDIC.
"The assumption of the deposits of the former Riverside Bank of the Gulf Coast presented a highly attractive strategic opportunity that significantly increased our southwest Florida presence, market share and franchise value. The acquisition strengthens our presence in the Naples, Fort Myers and Venice markets and provides a strong entrance into the contiguous Cape Coral community," said Thomas J. Longe, Chairman, Chief Executive Officer and President. "The Riverside transaction deployed a significant portion of the capital we raised through the issuance of preferred stock to the United States Treasury in December last year. The transaction also generated a substantial increase in liquidity which allowed us to reduce our wholesale funding by $114 million by paying off maturing FHLB borrowings and brokered deposits. Our team is working diligently to deploy this enhanced liquidity in the form of new loans to creditworthy individual and commercial customers in our markets.
"Our markets and communities continue to be adversely impacted by the broad national and local economic contraction, the shockwaves of the real estate market decline and sharply increased unemployment. As a result, segments of our consumer and commercial customers continue to struggle financially. The current economic and operating environment is highly challenging and we continue to work with our customers. We are focused on our new business initiatives and strategic plan, improvement of operating performance and resolving our nonperforming assets. Our private banking, wealth management and investment advisory service lines continue to grow private banking deposits and assets under management and have begun to exercise our newly granted authority to provide trust services," continued Longe.
Riverside transaction
We assumed $317 million of deposits, which included $21 million of out of market internet originated CDs, which we repriced and do not expect to retain. At March 31, 2009 we have retained $288 million of deposits excluding these CDs, or 97%, and the mix of deposits was as follows (in millions):
Noninterest Bearing Deposits $39.2 NOW 25.0 Money Market 97.5 Savings 7.5 CDs 119.0
We have begun the process of converting the former Riverside customers and deposits to our information systems, which we expect will be completed by the end of the second quarter.
Significant other developments are outlined below.
-- Under challenging and declining investment markets, Naples Capital Advisors and TIB Bank's trust department continued to establish new investment management and trust relationships increasing the market value of assets under management to $99 million as of quarter end while TIB private bankers developed new deposit relationships during the quarter of $14 million.
-- Our indirect auto loan portfolio declined $10.2 million during the quarter to $71.9 million, or 6% of total loans. Non-performing loans in this business segment decreased to $1.7 million in comparison to $1.9 million at December 31, 2008 and charge-offs during the quarter declined to $2.2 million compared to $2.3 million in the fourth quarter. Unsold repossessed vehicles declined to $407,000 from $601,000 at year end. Additionally, delinquency of indirect auto loans declined to 7% at quarter end down from 9% at year end.
-- The net interest margin declined to 2.65% during the quarter in comparison to the 2.85% in the fourth quarter of 2008 due primarily to the impact of the acquisition of the Riverside deposits. Initially, approximately $280 million of cash was received in the transaction which was temporarily invested in short-term and cash equivalent investments. $114 million was later utilized in March to pay down maturing wholesale funding and approximately $160 million was invested in higher yielding investment securities. Only $1 million of loans were acquired in the initial transaction. The impact of nonaccrual loans reduced the margin by approximately 15 basis points.
Credit Quality
Total nonaccrual loans increased $5.9 million during the quarter to $45.6 million. Excluding indirect and consumer loans, approximately $8.9 million of loans were placed on nonaccrual during the quarter. Partially offsetting this increase were $512,000 of net principal paid down, $1.4 million of loans charged off and $928,000 of loans foreclosed.
Of the loans placed on nonaccrual during the quarter, $4.8 million related to one commercial land development loan which we currently have reviewed and determined that no specific reserve is necessary at this time. The balance of the loans placed on nonaccrual are comprised of seventeen smaller commercial loans, commercial real estate and residential loans.
In response to the increase in non-performing loans and further contraction of economic activity in local markets and increased net charge-offs, the first quarter results include a provision for loan losses of $5.3 million. The provision reflects net charge-offs of $3.6 million and an increase in the reserve for loan losses of $1.7 million, to $25.5 million, or 2.09% of loans at March 31, 2009.
Detailed Financial Discussion
The higher net loss for the first quarter of 2009 compared to the net loss for the first quarter of 2008 was due to the increased provision for loan losses, higher non-interest expenses and a lower net interest margin, net interest income and non-interest income. TIB Financial's results of operations during 2009 include the operations of nine former branches of Riverside Bank of the Gulf Coast subsequent to their assumption on February 13, 2009.
Our provision for loan losses of $5.3 million reflects net charge-offs of $3.6 million and an increase in the allowance for loan losses of $1.7 million. As of March 31, 2009, non-performing loans were $45.6 million or 3.74% of loans, an increase from the $39.8 million and 3.25% of loans as of December 31, 2008.
The allowance for loan losses increased to $25.5 million, comprising 2.09% of total loans, resulting from our provision for loan losses exceeding net charge-offs for the quarter by 47%. Net charge-offs during the quarter decreased to 1.19% of average loans on an annualized basis compared to 3.02% for the prior quarter, due primarily to the fourth quarter charge-downs of non-performing loans.
The tax equivalent net interest margin of 2.65% for the three months ended March 31, 2009 decreased in comparison with the 2.85% net interest margin reported during the fourth quarter of 2008. The decline is primarily due to the impact of the acquisition of the deposits and operations of nine former Riverside Bank of the Gulf Coast branches and associated assets combined with a higher level of non-performing loans during the first quarter. Upon closing of the transaction, execution of our investment plan included purchasing intermediate maturity investment securities and maintaining a significant balance of lower yielding money market and cash equivalent securities to reduce wholesale funding. The intermediate term investments are intended to maintain available liquidity to redeploy as loans to local consumers and businesses. The maintenance of this higher level of lower yielding short-term liquid assets and intermediate investment securities has reduced the net interest margin. We estimate that the assumption of the Riverside deposits and the initial investment of the significant cash proceeds generated no net interest income during the first quarter because the interest cost of the deposits exceeded the yield of the initial investments made. As a result of our repricing of a portion of the assumed deposits, the $114 million reduction of wholesale funding in March and the income from our investment strategy, we estimate that net interest income will be generated from the Riverside transaction beginning in the second quarter.
Excluding net gains on investment securities, non-interest income was $1.8 million in the first quarter of 2009 compared to $1.6 million in the first quarter last year. The increase is due primarily to higher deposit service charges and investment advisory fees, partially offset by lower fees due to lower sales of residential loans in the secondary market. The former Riverside operations contributed approximately $353,000 of non-interest income during the period.
During the first quarter of 2009, non-interest expense rose 3% to $13.4 million compared to $13.0 million for the first quarter of 2008. Total non-interest expense associated with the former Riverside operations amounted to approximately $900,000. The first quarter 2009 non-interest expense includes an increase of $1.3 million in salaries and employee benefits over the first quarter of 2008. This increase includes approximately $316,000 in salaries and employee benefits expenses associated with new employees hired in connection with the Riverside transaction and approximately $674,000 in unrelated severance. The results for the quarter also include $320,000 of OREO related expenses; comparable to the $306,000 incurred during the first quarter of 2008. Other expense in the first quarter of 2008 included $1.2 million in write-downs of repossessed vehicles and related assets attributable to our indirect lending operations and its restructuring.
During the first quarter of 2009, the Board of Directors of TIB Financial Corp. declared a 1% stock dividend which was distributed on April 10, 2009 to all TIB Financial Corp. common shareholders of record as of March 31, 2009. The Board of Directors will continue to evaluate our dividend policy in light of current and expected trends in our financial performance and financial condition.
About TIB Financial Corp.
Headquartered in Naples, Florida, TIB Financial Corp. is a growth-oriented financial services company with approximately $1.8 billion in total assets and 28 full-service banking offices throughout the Florida Keys, Homestead, Naples, Bonita Springs, Fort Myers, Cape Coral and Venice. TIB Financial Corp. is also the parent company of Naples Capital Advisors, Inc., a registered investment advisor with approximately $99 million of assets under advisement.
TIB Financial Corp., through its wholly owned subsidiaries, TIB Bank, The Bank of Venice and Naples Capital Advisors, Inc., serves the personal and commercial banking and investment management needs of local residents and businesses in its market areas. The companies' experienced professionals are local community leaders, who focus on a relationship-based approach built around anticipating specific customer needs, providing sound advice and making timely decisions. To learn more about TIB Bank, The Bank of Venice and Naples Capital Advisors, Inc., visit www.tibbank.com, www.bankofvenice.com and www.naplescapitaladvisors.com, respectively.
Copies of recent news releases, SEC filings, price quotes, stock charts and other valuable information may be found on TIB's investor relations site at www.tibfinancialcorp.com. For more information, contact Thomas J. Longe, Chairman and Chief Executive Officer at (239) 659-5857, or Stephen J. Gilhooly, Executive Vice President and Chief Financial Officer, at (239) 659-5876.
Except for historical information contained herein, the statements made in this press release constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements involve certain risks and uncertainties, including statements regarding the Company's strategic direction, prospects and future results. Certain factors, including those outside the Company's control, may cause actual results to differ materially from those in the "forward-looking" statements, including economic and other conditions in the markets in which the Company operates; risks associated with acquisitions, competition, seasonality and the other risks discussed in our filings with the Securities and Exchange Commission, which discussions are incorporated in this press release by reference.
TIB FINANCIAL CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
For the Quarter Ended
March 31, December 31, September 30, June 30, March 31,
2009 2008 2008 2008 2008
Interest and dividend income $ 20,822 $ 21,223 $ 22,242 $ 21,777 $ 22,922
Interest expense 10,065 10,504 10,566 10,368 12,066
NET INTEREST INCOME 10,757 10,719 11,676 11,409 10,856
Provision for loan losses 5,309 15,101 4,768 5,716 2,654
NON-INTEREST INCOME:
Service charges on deposit accounts 966 750 747 719 722
Fees on mortgage loans sold 115 154 176 213 232
Investment securities gain (loss), net 596 (4,221 ) (126 ) (1,912 ) 910
Investment advisory fees 193 141 153 136 125
Other income 509 421 497 475 472
Total non-interest income 2,379 (2,755 ) 1,447 (369 ) 2,461
NON-INTEREST EXPENSE:
Salaries & employee benefits 7,380 6,078 6,045 6,358 6,053
Net occupancy expense 2,152 2,168 2,171 2,186 2,014
Other expense 3,835 5,866 3,770 3,320 4,959
Total non-interest expense 13,367 14,112 11,986 11,864 13,026
Loss before income taxes (5,540 ) (21,249 ) (3,631 ) (6,540 ) (2,363 )
Income tax benefit (2,082 ) (7,994 ) (1,435 ) (2,506 ) (918 )
NET LOSS $ (3,458 ) $ (13,255 ) $ (2,196 ) $ (4,034 ) $ (1,445 )
Income earned by preferred shareholders 708 165 - - -
Net loss allocated to common shareholders $ (4,166 ) $ (13,420 ) $ (2,196 ) $ (4,034 ) $ (1,445 )
NET LOSS PER COMMON SHARE: ($0.29 ) ($0.93 ) ($0.15 ) ($0.28 ) ($0.11 )
TIB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(Dollars in thousands, except per share data)
For the Quarter Ended
March 31, December 31, September 30, June 30, March 31,
2009 2008 2008 2008 2008
Real estate mortgage loans:
Commercial $ 666,780 $ 658,516 $ 666,263 $ 646,223 $ 624,557
Residential 213,037 205,062 191,132 173,729 128,191
Farmland 13,438 13,441 13,541 13,655 11,284
Construction and vacant land 142,175 147,309 155,465 156,706 159,377
Commercial and agricultural loans 65,723 71,352 65,987 67,234 70,170
Indirect auto loans 71,868 82,028 91,639 99,208 112,163
Home equity loans 34,325 34,062 30,141 27,535 22,619
Other consumer loans 11,245 11,549 11,291 12,597 10,121
Total loans $ 1,218,591 $ 1,223,319 $ 1,225,459 $ 1,196,887 $ 1,138,482
Gross loans $ 1,220,073 $ 1,224,975 $ 1,227,181 $ 1,198,526 $ 1,139,993
Net loan charge-offs $ 3,604 $ 9,353 $ 3,360 $ 4,945 $ 1,771
Allowance for loan losses $ 25,488 $ 23,783 $ 18,035 $ 16,627 $ 15,856
Allowance for loan losses/total loans 2.09 % 1.94 % 1.47 % 1.39 % 1.39 %
Non-performing loans $ 45,647 $ 39,776 $ 26,985 $ 22,601 $ 26,870
Allowance for loan losses/non-performing loans 56 % 60 % 67 % 74 % 59 %
Non performing loans/gross loans 3.74 % 3.25 % 2.20 % 1.89 % 2.36 %
Annualized net charge-offs/average loans 1.19 % 3.02 % 1.10 % 1.70 % 0.63 %
Total interest-earning assets $ 1,731,271 $ 1,512,909 $ 1,466,454 $ 1,474,946 $ 1,410,981
Other real estate owned $ 5,032 $ 4,323 $ 4,648 $ 5,037 $ 4,495
Other repossessed assets $ 407 $ 601 $ 635 $ 2,706 $ 1,964
Goodwill and intangibles, net of accumulated amortization $ 14,225 $ 8,170 $ 8,305 $ 8,463 $ 8,594
Interest-bearing deposits:
NOW accounts $ 174,524 $ 142,291 $ 148,362 $ 185,770 $ 180,610
Money market 204,974 102,486 130,910 162,943 180,207
Savings deposits 114,806 73,832 48,505 51,864 51,860
Time deposits 759,061 688,675 649,902 579,403 544,428
Non-interest bearing deposits 183,095 128,384 135,518 158,210 163,846
Total deposits $ 1,436,460 $ 1,135,668 $ 1,113,197 $ 1,138,190 $ 1,120,951
Tax equivalent net interest margin 2.65 % 2.85 % 3.18 % 3.25 % 3.13 %
Loss allocated to common shareholders / average assets (0.95 ) % (3.35 ) % (0.56 ) % (1.07 ) % (0.39 ) %
Loss on average equity (11.56 ) % (48.77 ) % (8.77 ) % (15.77 ) % (5.83 ) %
Non-interest expense/tax equivalent net interest income and 101.47 % 176.36 % 91.08 % 107.05 % 97.46 %
non-interest income
Average shares outstanding 14,509,694 14,502,330 14,495,835 14,486,321 13,548,402
End of quarter shares outstanding 14,602,069 14,602,069 14,597,734 14,597,734 14,570,761
Total equity $ 117,852 $ 121,114 $ 97,680 $ 99,149 $ 103,443
Book value per common share $ 5.80 $ 6.04 $ 6.69 $ 6.79 $ 7.10
Tier 1 capital to average assets 6.9 % 8.9 % 7.6 % 8.0 % 8.5 %
Tier 1 capital to risk weighted assets 9.1 % 11.3 % 9.4 % 9.6 % 10.5 %
Total capital to risk weighted assets 10.4 % 12.6 % 10.7 % 10.9 % 11.7 %
Total assets $ 1,836,526 $ 1,610,114 $ 1,563,466 $ 1,578,821 $ 1,512,637
TIB FINANCIAL CORP. AND SUBSIDIARIES
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
Quarter Ended Quarter Ended
March 31, 2009 December 31, 2008
Average Interest* Yield* Average Interest* Yield*
Balances Balances
Loans $ 1,223,542 $ 17,840 5.91 % $ 1,230,518 $ 18,730 6.06 %
Investments 287,829 2,913 4.10 % 211,381 2,422 4.56 %
Money Market Mutual Funds 84,409 103 0.49 % - - -
Interest bearing deposits 38,393 20 0.21 % 35,558 53 0.60 %
Federal Home Loan Bank stock 11,728 (19 ) -0.67 % 11,925 20 0.66 %
Fed funds sold and securities purchased under agreements to resell 7,564 3 0.16 % 13,020 36 1.10 %
Total interest earning assets 1,653,465 20,860 5.12 % 1,502,402 21,261 5.63 %
Non-interest earning assets 116,198 93,478
Total assets $ 1,769,663 $ 1,595,880
Interest bearing liabilities:
NOW $ 167,889 $ 329 0.79 % $ 138,488 $ 331 0.95 %
Money market 155,485 661 1.72 % 112,047 521 1.85 %
Savings 91,984 408 1.80 % 60,831 233 1.52 %
Time 746,393 6,501 3.53 % 686,324 6,719 3.89 %
Total interest-bearing deposits 1,161,751 7,899 2.76 % 997,690 7,804 3.11 %
Short-term borrowings and FHLB advances 252,160 1,430 2.30 % 280,059 1,788 2.54 %
Long-term borrowings 63,000 736 4.74 % 63,000 912 5.76 %
Total interest bearing liabilities 1,476,911 10,065 2.76 % 1,340,749 10,504 3.12 %
Non-interest bearing deposits 155,839 130,049
Other liabilities 15,596 16,967
Shareholders' equity 121,317 108,115
Total liabilities and shareholders' equity $ 1,769,663 $ 1,595,880
Net interest income and spread $ 10,795 2.36 % $ 10,757 2.51 %
Net interest margin 2.65 % 2.85 %
* Presented on a fully tax equivalent basis
TIB FINANCIAL CORP. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Dollars in thousands)
Nonaccrual loans are as follows:
As of March 31, 2009 As of December 31, 2008
Loan/Collateral Type Number of Outstanding Number of Outstanding
Loans Balance Loans Balance
Residential 15 $3,815 18 $4,014
Commercial 1-4 family investment 10 7,892 9 7,943
Commercial and agricultural 8 659 2 64
Commercial real estate 20 13,719 18 13,133
Commercial land development 6 17,707 5 12,584
Government guaranteed loans 3 143 3 143
Indirect auto, auto and consumer loans 162 1,712 155 1,895
Total $45,647 $39,776
Impaired loans are as follows:
March 31, 2009 December 31, 2008
Loans with no allocated allowance for loan losses $27,289 $8,344
Loans with allocated allowance for loan losses 60,783 53,765
Total $88,072 $62,109
Amount of the allowance for loan losses allocated $7,947 $6,116
Nonaccrual Loan Activity (Other Than Indirect Auto and Consumer) Nonaccrual loans at December 31, 2008 $37,881 Net principal paid down on nonaccrual loans (512) Charge-offs (1,391) Loans foreclosed (928) Loans placed on nonaccrual 8,885 Nonaccrual loans March 31, 2009 $43,935 OREO Activity OREO as of December 31, 2008 $4,323 Real estate acquired 928 Write-down of value (111) Property sold (108) OREO as of March 31, 2009 $5,032
SOURCE: TIB Financial Corp.
TIB Financial Corp., Naples Thomas J. Longe, Chairman and Chief Executive Officer 239-659-5857 or Stephen J. Gilhooly, Executive Vice President and Chief Financial Officer 239-659-5876
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